H.B. No. 2249
  relating to the regulation of staff leasing services.
         SECTION 1.  Section 91.001, Labor Code, is amended by adding
  Subdivisions (2-a) and (18) to read as follows:
               (2-a)  "Assurance organization" means an independent
  entity approved by the commission that:
                     (A)  provides a national program of accreditation
  and financial assurance for staff leasing services companies;
                     (B)  has documented qualifications, standards,
  and procedures acceptable to the department; and
                     (C)  agrees to provide information, compliance
  monitoring services, and financial assurance useful to the
  department in accomplishing the provisions of this chapter.
               (18)  "Working capital" of an applicant means the
  applicant's current assets minus the applicant's current
  liabilities as determined by generally accepted accounting
         SECTION 2.  Section 91.014, Labor Code, is amended to read as
  An applicant for an original or renewal license must demonstrate
  positive working capital in the following amounts [a net worth as
               (1)  $50,000 if the applicant employs fewer than 250
  assigned employees;
               (2)  $75,000 if the applicant employs at least 250 but
  not more than 750 assigned employees; and
               (3)  $100,000 if the applicant employs more than 750
  assigned employees.
         (b)  The applicant shall [may] demonstrate the applicant's
  working capital [net worth] to the department by providing the
  department with the applicant's financial statement [or a copy of
  the applicant's most recent federal tax return]. The financial
  statement must be prepared in accordance with generally accepted
  accounting principles, be audited by an independent certified
  public accountant, and be without qualification as to the going
  concern status of the applicant. An applicant that has not had
  sufficient operating history to have audited financial statements
  based on at least 12 months of operations must meet the financial
  capacity requirements required by Subsection (a) and provide the
  department with financial statements that have been reviewed by a
  certified public accountant. The applicant may [also] satisfy
  any deficiencies in the working capital [the net worth] requirement
  through guarantees, letters of credit, a bond in an amount that
  demonstrates compliance with the amounts required under
  [requirements of] Subsection (a), or other security acceptable to
  the department. A guaranty is not acceptable to satisfy this
  subsection unless the applicant submits sufficient evidence to
  satisfy the department that the guarantor has adequate resources to
  satisfy the obligations of the guaranty.
         (c)  [In computing net worth, an applicant shall include
  adequate reserves for all taxes and insurance, including reserves
  for claims incurred but not paid and for claims incurred but not
  reported under plans of self-insurance for health benefits. The
  computation of net worth by an applicant is to be made according to
  Section 448, Internal Revenue Code (26 U.S.C. Section 448).
         [(d)     A document submitted to establish net worth must show
  the net worth on a date not earlier than nine months before the date
  on which the application is submitted. A document submitted to
  establish net worth must be prepared or certified by an independent
  certified public accountant.] Information submitted to or
  maintained by the department is subject to Chapter 552, Government
  Code, other than information related to:
               (1)  identification of client companies;
               (2)  working capital [net worth];
               (3)  financial statements; or
               (4)  federal tax returns.
         SECTION 3.  Section 91.020, Labor Code, is amended to read as
         Sec. 91.020.  GROUNDS FOR DISCIPLINARY ACTION.  The
  department may take disciplinary action against a license holder on
  any of the following grounds:
               (1)  engaging in staff leasing services or offering to
  engage in the provision of staff leasing services without a
               (2)  transferring or attempting to transfer a license
  issued under this chapter;
               (3)  violating this chapter or any order or rule issued
  by the executive director or commission under this chapter;
               (4)  failing after the 31st day after the date on which
  a felony conviction of a controlling person is final to notify the
  department in writing of the conviction;
               (5)  failing to cooperate with an investigation,
  examination, or audit of the license holder's records conducted by
  the license holder's insurance company or the insurance company's
  designee, as allowed by the insurance contract or as authorized by
  law by the Texas Department of Insurance;
               (6)  failing after the 31st day after the effective
  date of a change in ownership, principal business address, or the
  address of accounts and records to notify the department and the
  Texas Department of Insurance of the change;
               (7)  failing to correct any tax filings or payment
  deficiencies within a reasonable time as determined by the
  executive director;
               (8)  refusing, after reasonable notice, to meet
  reasonable health and safety requirements within the license
  holder's control and made known to the license holder by a federal
  or state agency;
               (9)  being delinquent in the payment of the license
  holder's insurance premiums other than those subject to a
  legitimate dispute;
               (10)  being delinquent in the payment of any employee
  benefit plan premiums or contributions other than those subject to
  a legitimate dispute;
               (11)  knowingly making a material misrepresentation to
  an insurance company or to the department or other governmental
               (12)  failing to maintain the working capital [net
  worth requirements] required under Section 91.014; or
               (13)  using staff leasing services to avert or avoid an
  existing collective bargaining agreement.
         SECTION 4.  Subchapter B, Chapter 91, Labor Code, is amended
  by adding Section 91.021 to read as follows:
         Sec. 91.021.  ELECTRONIC FILING AND COMPLIANCE.  (a)  The
  commission may adopt rules to permit the acceptance of electronic
  filings under this chapter, including the filing of applications,
  documents, reports, and other documents required by this chapter.
  The rules may provide for the acceptance of electronic filing and
  other assurance by an assurance organization, qualified and
  approved by the commission, that provides satisfactory assurance
  and documentation of compliance acceptable to the department that
  meets or exceeds the requirements of this chapter.
         (b)  A staff leasing services company may authorize an
  assurance organization that is qualified and approved by the
  commission to act on its behalf in complying with the licensing
  requirements of this chapter, including the electronic filing of
  information and the payment of application and licensing fees. Use
  of an assurance organization is optional and is not mandatory for a
  staff leasing services company.
         (c)  Nothing in this section may be construed to change or
  affect the department's authority to issue licenses, revoke
  licenses, conduct investigations, or enforce any provision of this
         SECTION 5.  Subchapter D, Chapter 91, Labor Code, is amended
  by adding Section 91.050 to read as follows:
         Sec. 91.050.  TAX CREDITS AND OTHER INCENTIVES. (a) For the
  purpose of determining tax credits, grants, and other economic
  incentives provided by this state or other governmental entities
  that are based on employment, assigned employees are considered
  employees of the client and the client is solely entitled to the
  benefit of any tax credit, economic incentive, or other benefit
  arising from the employment of assigned employees of the client.
  This subsection applies even if the staff leasing services company
  is the reporting employer for federal income tax purposes.
         (b)  If a grant or the amount of any incentive described by
  Subsection (a) is based on the number of employees, each client
  shall be treated as employing only those assigned employees
  co-employed by the client. Assigned employees working for other
  clients of the staff leasing services company may not be included in
  the computation.
         (c)  Each staff leasing services company shall provide, on
  the request of a client or an agency of this state, employment
  information reasonably required by the state agency responsible
  for the administration of any tax credit or economic incentive
  described by Subsection (a) and necessary to support a request,
  claim, application, or other action by a client seeking the tax
  credit or economic incentive.
         SECTION 6.  Section 91.001(12), Labor Code, is repealed.
         SECTION 7.  The changes in law made by this Act regarding the
  qualifications for or the issuance or renewal of a license apply to
  a staff leasing services license issued or renewed under Chapter
  91, Labor Code, on or after December 31, 2010. A license issued or
  renewed before December 31, 2010, is governed by the law as it
  existed immediately before that date, and that law is continued in
  effect for that purpose.
         SECTION 8.  (a) Except as provided by Subsection (b) of this
  section, this Act takes effect September 1, 2009.
         (b)  Section 91.014, Labor Code, as amended by this Act,
  takes effect December 31, 2011.
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
         I certify that H.B. No. 2249 was passed by the House on April
  24, 2009, by the following vote:  Yeas 137, Nays 0, 1 present, not
  Chief Clerk of the House   
         I certify that H.B. No. 2249 was passed by the Senate on May
  14, 2009, by the following vote:  Yeas 31, Nays 0.
  Secretary of the Senate    
  APPROVED:  _____________________